Putin urges Russian economy to prepare for war – even the oligarchs

The aggravation of the international situation compels the Russian leadership to prepare the country for a possible war.

The set of measures includes not only regular exercises conducted by the Ministry of Defense, but also preparing the economy for full mobilization.

According to Vladimir Putin, if necessary, all large enterprises of Russia should be ready to increase the production of military requirements at any time. This applies not only to the public sector, but also to private business.

“The ability of the economy to rapidly increase the volume of defense products and services at the right time is one of the most important conditions for ensuring the military security of the state. All strategic and simply large enterprises should be ready, regardless of the form of ownership,” the supreme commander-in-chief emphasized.

He also recalled that in 2015-2016, instructions were given to modernize production facilities, build up a reserve of material and technical resources and ensure the smooth running of the transportation of troops.

In autumn of 2016, during exercises in the Caucasus, a new wartime control system was tested, encompassing the subordination of governors, FSB and police to the leaders of the Defense Ministry. The new management structure was created as per the “Defense Plan of the Russian Federation for 2016-2020”.

If for the public sector, Putin’s task of mobilization looks natural, then to private business it may look a little imposing. Many of them consider defensive spending to be an evil that hinders economic growth. Among them, the head of the Council of the Center for Strategic Research Alexei Kudrin, who suggested to the president a reduction in defense spending.

The head of the Party of the Great Fatherland, writer Nikolai Starikov assesses the President’s mobilization message from the point of view of an ordinary Russian citizen.

– Our president said things that should be obvious to any Russian citizen. First: we live in a troubled world and a military conflict sooner or later, can break out. Second: the economy of our country is capitalistic. And this means that there are state-owned enterprises and there are private ones. And the third: in case of a military conflict, both the first and the second should work together for victory. That is, now, in peacetime, all the preparation necessary for this must be done.

According to Valentina Katasonova, professor at the Department of International Finance at MGIMO , Russian history teaches that private capital does nothing for the country’s defense capability.

– This, of course, was a good statement of the president. But it seems to me that it was poorly thought out. Time will prompt the next steps. In the meantime, in order to understand the current problems, it is worth recalling the story of a hundred years ago, when Russia, poorly prepared, was drawn into the First World War. At that time, Russia was forced to import almost half of its weapons. Mostly from the United States.

A part of the military components produced at Russian enterprises were very expensive. Because the enterprises of the military-industrial complex of that time were private. As a result, private entrepreneurs, or, more simply, the capitalists, perceived the war as a way to make good money.

Finally, through trial and error, by the end of 1915 and beginning of 1916, they realized that it was impossible to ensure the country’s defense capability, relying on private enterprises. The construction of state-owned factories began, some private military plants began to be quietly nationalized and only then Russia overcame the shell famine. There were new kinds of ammunition and weapons. But unfortunately, it was too late.

Head of the Laboratory of Military Economics of the Institute of Gaidar, Vasily Zatsepin, considers it reasonable to combine state coercion and material benefits.

– There are mobilization plans and everything is written down. However, it is secret and we do not know what is in there. In wartime, state enterprises and private enterprises will participate in the production of military products. And even those who have never thought before that they can do something for defense – they will.

That is, the enforcement mechanism will be used. No one will ask them if they want to work in the interests of defense?

– Material benefit, too, can be had. Work will not be done for free. Even in the Soviet period, for example, a tank was worth very specific money.

In turn, the economist and chairman of the Accounts Chamber of the Russian Federation from 1995 to 2000, Yury Boldyrev believes that the announcement of the president is incompatible with Russia’s ‘offshore economy.’

– This statement of the president was late, by at least, ten years, or even a full twenty! I recall that Putin’s Munich speech was in 2007. In addition, I think this statement is pre-election PR. Because the real activity on this topic does not begin with a statement about the need for mobilization, but with a strict suppression of the withdrawal of money offshore.

Indeed, according to recently published data, the export of capital over the past year has almost tripled. “Mobilization must start with the concentration of resources in the country.” – Boldyrev concluded.

Inessa Sinchougova is an Editor and Journalist at Fort Russ News, as well as a research fellow and translator of the Belgrade based think-tank, the Center for Syncretic Studies. She was educated at Victoria University of Wellington (New Zealand), in the field of Political Science and was previously employed in Marketing and Communications Strategy for a Multi-National Corporation. She runs a popular YouTube channel for translations of key Russian Foreign Policy figures and appears regularly on other alternative media channels.

Inessa S is an Editor, Journalist and Translator at FRN. She was educated in the field of Political Science and has previous marketing and communications strategy experience for enterprises and corporations. She runs a popular YouTube channel for translations of key Russian Foreign Policy figures and appears regularly on other alternative media channels. If you like her work, you can support her Patreon here.